The LVMH fashion and leather goods division would then buy Christian Dior Couture for an enterprise value of €6.5 billion.
LVMH, the world’s biggest luxury group by revenue, already owns Parfums Christian Dior, and the deal would give it ownership of the Christian Dior haute couture, leather, men’s and women’s ready-to-wear, and shoe businesses.
Analysts reacted positively to news of the deal with Christian Dior, which had long been expected by industry observers.
Over the past five years, revenue at Christian Dior has doubled and profitability has improved.
The boards of Christian Dior and LVMH are unanimously in favor of the deals, the statement said, and they have appointed independent experts to review the terms.
Christian Dior and LVMH combined by French billionaire
Image copyright Reuters Image caption Mr Arnault owns stakes in LVMH, Christian Dior and rival HermesShares in Christian Dior jumped about 11% and LVMH shares rose 5.4% on Tuesday.
That will unite Christian Dior Couture, the 70 year old fashion label which has been worn by film stars from Elizabeth Taylor to Jennifer Lawrence, with the Christian Dior perfume and beauty business already owned by LVMH.
Bernard Arnault is the boss of LVMH, which runs Louis Vuitton and Moet champagne, and is also the main shareholder in Christian Dior.
Image copyright Getty ImagesFrance’s richest man has made a £10bn move to combine the Christian Dior fashion house and luxury goods firm LVMH under the same ownership.
As well as LVMH and Dior, he also owns stakes in French luxury goods rival Hermes and supermarket chain Carrefour.
LVMH luxury group takes full control of Christian Dior
LVMH, which already owns Christian Dior perfumes, said in a statement on Tuesday it had now agreed to buy Christian Dior Couture for 6.5 billion euros ($7.0 billion).
The evolution of Christian Dior’s revolutionary New Look The birth of the icon On February 12, 1947, Christian Dior presented his debut haute couture collection in Paris.
The evolution of Christian Dior’s revolutionary New Look Looking forward A shift in style was apparent at Dior in the mid-50s.
In a research note, analysts of Barclays Bank spoke of a “good acquisition”, saying the “strong brand Christian Dior” would be reunited with LVMH’s “very profitable” perfume business.
The evolution of Christian Dior’s revolutionary New Look Everybody wants to wear Dior Dior’s New Look became instantly popular among the couture clientele, and the middle class followed quickly.
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